Financial literacy is the foundation for successful employee participation
Employee participation programs (EPPs) can quickly become complex. Every program is different, as is employees’ understanding of the EPP’s benefits, their expectations, goals, and available options.
Organizations must establish a common understanding of the EPP through authentic internal communication, and by providing basic financial knowledge.
Three reasons to promote financial education
Organizations offer EPPs as voluntary, additional benefits to enable employees to share in the company’s success. These monetary benefits are part of the Total Rewards System. As with other benefits, the real value for employees only becomes clear when employees actually use them—and participation is always voluntary, with no impact on employment status.
For this reason, EPPs need a clear value proposition, a compelling story, and an attention-grabbing campaign that stands out from the noise of daily internal communication. A professionally designed campaign builds awareness and sparks interest in the EPP, which must be supported by persuasive and informative content.
1. Informed employees = appreciative employees
Employee Participation Programs can include stock option plans, discount plans, share-matching initiatives, and profit-sharing schemes. Depending on the model, employees may benefit from a share of the company’s profit, increased organizational value, or dividends—but every model also comes with risks. Without basic financial literacy, the opportunities and risks of employee participation remain abstract for many employees.
Research has shown that financial competence follows an inverted U-shape, with the lowest levels found among the youngest and oldest demographic groups, while mid-career employees tend to have the highest literacy levels. Developing a persuasive financial education program starts with understanding your target groups, and their level of financial competence. Segmented communication and interactive learning formats help address diverse knowledge levels. Employees can only truly appreciate the advantages of an EPP when it is clearly explained, and tailored to the needs of each target audience. It is also important to note that not every employee will participate, but every employee should have the chance to understand the advantages of the EPP, and see the value of the knowledge they gain (as part of the “Employee Experience”). All this strengthens your employer brand, and leads to greater employee satisfaction and motivation.
Tips for better communication
- Analyse the program requirements and determine the level of financial knowledge needed
Tip:Use focus groups and moderated formats - Create a glossary with definitions of key terminology
Tip:Use simple language that is easy to translate, and avoid unnecessary jargon - Compile a list of frequently asked questions that employees might have before joining the program
Tip:Display the answers in text and visual formats, using interactive media and educational content for different knowledge levels
Tip:Integrate content into your Learning Management System (LMS), leverage existing synergies, and create financial education content that goes beyond EPP communication - Develop entertaining knowledge tests
Tip:Use gamification for playful learning
- Develop a segmented communications strategy
Tip:Consider the current needs of each target group, their knowledge level, and the organizational context. Localize communication - Train all communicators and multipliers
Tip:Offer recurring training opportunities, and provide communication toolkits - Regularly encourage employees to test and develop their basic financial competence
Tip:Coordinate with your internal corporate communications team - Provide the entire target audience with the opportunity to take part in the EPP: Announce, inform, and educate
Tip:Plan your campaign backward from the participation deadline
2. Financial education for a stronger future
By understanding how EPPs work, employees also gain better insight into other remuneration elements, such as company pension schemes, and see how these benefits connect within the Total Rewards package. In addition, with upcoming pay transparency regulations, employees are likely to receive more information about their compensation components. Having the financial knowledge to understand and evaluate this information will become ever more valuable.
Financial education fosters long-term financial responsibility and selfdetermination. In contrast, financial uncertainty can put strain on employees’ health and reduce motivation. Research has shown that financial wellbeing reduces absenteeism and boosts employer attractiveness.
Financial literacy is a combination of awareness, knowledge, skills, attitude and behavior, and is necessary to make sound financial decisions, and ultimately to achieve individual financial wellbeing.
3. Shared knowledge promotes team spirit
Employee participation can be a unifying force within a company—provided everyone understands the rules. Financial education for all promotes equality, improves understanding of company structures and financial indicators, and encourages a shared focus on organizational goals.
Conclusion:
Employee participation programs are more than just a financial benefit: They are tools that strengthen corporate culture, build employee loyalty, and boost productivity. Their full potential is unlocked when companies invest directly in the financial education of their employees, because knowledge is the basis for informed decision-making—and for sustainable company success.*
*This article was originally published (in German) in the Unternehmer magazine special edition “Employee Participation”, June 2025, by Going Public Media AG.
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